The European Central Bank will stay in the background through upcoming elections in key European countries and is only likely to signal a shift away from its ultra-easy monetary policy toward the end of this year or early next, a Reuters poll found.
The latest poll of ECB watchers comes on the heels of increased optimism that the euro zone economy, while still not performing strongly, is doing better than previously thought. Private surveys point to robust business activity in the region - buoyed by a weaker euro.
Price pressures, too, are on the rise. Data on Thursday showed euro zone prices rose in February by 2 percent, in line with a Reuters poll, on higher energy prices.
But it is not clear whether the latest upswing in euro zone economic activity will last.
Core inflation is still stuck in low gear and with the ECB already buying billions of euros worth of bonds each month and its key interest rates at zero or negative, there is little more the central bank could do to provide more stimulus.
The ECB is expected to keep its policy on hold when it meets on March 9 and the consensus from the latest Reuters poll of more than 60 economists shows key interest rates are expected to be on hold until at least the second half of next year.
"Despite rising inflation, the moderate economic recovery is not likely to trigger any hectic reaction at the ECB and, given the high degree of political uncertainty, there is little to suggest any necessity to abandon its quantitative easing program in the near future," noted Jens Kramer and Christian Lips of Nord LB, the most accurate forecasters in Reuters polls on euro zone economic data last year.
"We still see rate hikes as a long way off, unlike the markets which have recently priced in a first rate hike in 2018. The hawks appear to be weaker and more restrained than the doves at the moment," they added.
Potential upsets in elections in the Netherlands, France and Germany could also damage or derail the recovery.
Financial markets are particularly watching the turbulent French election campaign, with far-right candidate Marine Le Pen seeking to exit the euro zone if she wins.
Still, the ECB's next move is likely to be a signal to shift away from its easy policy.
When asked what measure the central bank would choose to indicate a start of policy tightening, 40 of the 45 economists who responded picked either a tweak to forward guidance or a cutback on monthly asset purchases. The responses were split equally between the two options.
Four respondents chose a deposit rate hike, while only one said an end to long-term cheap loans was an option.
A majority of the 20 respondents who picked a tweak to forward guidance expect it to happen by the end of this year.
Of those 20 economists who said the central bank will taper its monthly asset purchases to signal monetary policy tightening, most expect that to be happen only early next year.
Only a handful of economists expect the ECB to move any earlier.
"The debate on when and how to exit QE and the negative interest rate regime, even only in initial form, will have to wait a little longer," noted Anna Maria Grimaldi, economist at Intesa Sanpaolo.
"However, if data prove to be equally strong in the spring, and if Marine Le Pen does not win the ballot stage of the presidential elections in France in May, a discussion on the timing and operational details of an exit from QE and from the negative interest rate regime could begin in June."
Asked when the ECB will start to taper the amount of its monthly asset purchases with an intention to shutter the program, almost three-quarters of the 44 respondents said early next year.
The ECB is forecast to take six months to a year to reduce its monthly asset purchases to zero. The U.S. Federal Reserve took about a year to wind down its own quantitative easing program.
(Polling and analysis by Kailash Bathija and Purnita Deb; Editing by Ross Finley/Jeremy Gaunt)